Jollibee’s Introduction In1975 Tony Tan and his brothers opened two Ice cream parlors in Manila, Philippines Inthe same year they expanded their menu and began offering quick meals Soon they realized that their revenue is more from the side orders In 1978, Jollibee Food Corporation(JFC) is formed
JFC’s in Philippines High quality and reasonably priced Tailored menu specifically for Filipinos Strong understanding of Filipino’s taste and preference Highly diverse variety of offerings Benchmarking of McDonalds
Milestones in Journey of JFC • First Philippine Food chain to cross1989 “1 Billion Peso” mark • JFC went to Public on Philippine Stock1993 Exchange • Purchased Greenwich Pizza1994
• Acquired right to operate Philippine’s Franchise of Delifrance1995 • Bought Chowking Foods Corporation2000 • JFC topped the “Asia’s Most Admired Company” survey2004
Financial Data of JFC, 1998-2004 2004 2003 2002 2001 2000 1999 1998 Sales 35.5 28.9 26,8 24.1 20.3 18.1 16.7 Gross 26.2 21.6 20.3 18.8 15.7 14.1 12.9 RevenueNet Income 1.6 1.3 1.0 0.5 0.9 0.6 0.8Employees 26.5 21.6 22.0 21.8 20.6 14.2 13.9 (‘000)All financial data in billion of pesos
Secrets of Success of JFC in Terms of Marketing, Operations and HRThe acronym FSC represented its commitmenttowards these three areas:Every Food (F) item served to the public mustmeet the company’s excellent standards or it willnot be served at all, Service (S) must be fast andcourteous; and Cleanliness (C) from sidewalk tokitchen, from uniforms to utensils, must bemaintained at all times.
Marketing Strategies Closer to Filipino families Unique Filipino taste Homely environment In-store play activities Advertising strategy that was deeply rooted in traditional values
Operations Use of IT in its operations Decentralizing the organization Each year some stores are closed
Human Resource Management Hire right candidates to manage its operations and strategy planning Training programs for the employees to explain them- How to create a friendly environment in store?
Strategy Of Adding New Brands OrDiluting The Strength Of Original Brand JOLLIBEE GREENWICHPIZZA(1994) GREENWICH PIZZADELIFRANCE (1995) DELIFRANCE JOLLIBEEDELIFRANCE (1995) DELIFRANCE
Each brand is marketed independently but there must not be anyduplication of original Jollibee concept.MAIN RISK : Management time would be diverted to the other threebrands and there would be insufficient time to expand Jollibee.
Evaluate JFC’s performance overseas. Early1990s Jollibee restaurants were operating in Hong Kong, Brunei, Saipan, and Guam, Vietnam, Indonesia, Dubai, and Kuwait 1998 entered one of the most demanding fast- food markets in the world, the United States. (2 million Filipino immigrants).In the United States, by late 2004, six years after itsentry into this market, JFC only had seventeenstores—nine Jollibee and eight Chow King.
Marketing effectiveness has been diluted in the very competitive California environment by the need to promote three separate brands, each representing a different ethnic food category: Filipino, Chinese, and Japanese. Management time and resources have been wasted on the purchase of a Japanese food franchise (renamed Tomi’s Teriyaki), a food category in which JFC had no prior experience
Evaluate JFC’s performance overseas.At the end of 2003, prior to the purchase ofYonghe King in 2004, JFC had only thirty-three overseas stores, an increase of onlysix from the twenty-seven it had at the endof 1999.
To what extent can the companytransfer its core competency to its overseas operations?
JFC’s key success factors in thePhilippines (1)its understanding of local tastes and skills in catering to the needs of a specific niche market, (2) its operational efficiency in its commissaries and use of IT, (3) its ability to deliver consistently high levels of customer service (4)its skills in site selection. large number of stores in the Philippines advantage ofeconomies of scale in buying food and other supplies managing thelogistics of delivering supplies to individual stores
Jollibee’s key Transferability to Actions required tosuccess factors overseas markets allow a successful(KSF) transfer of KSFNiche Market Likely Introduce the moreHighly localized menu. - Overseas markets popular Jollibee mealsFood variety that that are chosen are that are found in the Philippines.targets the Filipino locations with highpalate. concentrations of - Slowly bring in the Filipinos. other varieties. -Ingredients used must be identical to those used in the Philippines to ensure consistent quality and taste. - Use a marketing strategy that leverages on Jollibee’s brand equity.
Jollibee’s key Transferability to Actions required tosuccess factors (KSF) overseas markets allow a successful transfer of KSFOperations and IT Likely Use the blueprint of the commissary in theState-of-the-art - Replicate the same Philippines.automation of kind of technology andcommissary. operating efficiency. - High initial investment to bring inUse of IT to speed up state-of-the-artoperations efficiency automation that willand study consumer help generate thetrends. volume and efficiency required by the overseas branch.
Jollibee’s key success Transferability to Actions required tofactors (KSF) overseas markets allow a successful transfer of KSFCustomer Service Likely -Jollibee should seek to understand theFantastic customer The mission statement expectations of localservice: and strong management customers and adapt its beliefs in recognizing the performance standards, importance of its front and so on accordingly.- Service orientation line staff in profitpervasive in many of generation. - Jollibee should bring inits activities. the best crew from its Philippines’s branches to- Recruitment, train the local hires inselection, and training Jollibee technology.(cycle for success) of - Important that Jollibeestaff. has a management team in the overseas market- Empowerment and that shares the same zealmotivation of staff. and ideals as those in the Philippines headquarters.
Jollibee’s key Transferability to Actions required tosuccess factors (KSF) overseas markets allow a successful transfer of KSFLocation Moderate Jollibee shouldGood, high traffic and continue to expand toconvenient locations. -Jollibee may be a late areas with high comer in the fast-food Filipino concentrationCommunities are industry of the and gain a foothold inpopulated largely with overseas market. such areas first.Filipinos. - Launch pad strategy of setting up outlets in places with high Filipino concentration may help offset the late comer disadvantage.
One possible conclusion that may be drawn from JFC’s international experience:: Only limited demand overseas for the Filipino- style fast food served by Jollibee. JFC’s entry (or rather, re-entry) into China through purchase of an 85 percent interest in the Shanghai-based Yonghe King chain, which serves Chinese-style fast food in ten cities, plays to JFC’s capabilities in taking over ownership and management of an already successful fast-food chain and strengthening its marketing and operational capabilities.
Expansion Plans Continue to be on the Philippines market. Focus on China. Overseas markets.
Continue to be on the Philippines market 89% of all stores are located in Philippines. Rapidgrowth is continuing. Most of this growth seems to be accounted for by franchised outlets as opposed to company-owned ones.
Focus on China The second most important area of focus is China Manage the growth of the eighty-nine- store of Yonghe King chain. Transfer relevant JFC operational and marketing expertise to enhance both YK’s appeal to consumers and its productivity China’s rapid economic development Success of both the KFC and McDonald’s